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Debunking Myths about Eliminating the Income Tax

AUGUSTA- The Maine Democratic Party and Maine Center for Economic Policy (MECEP) continues to defend the status quo in Augusta.

Here’s the real truth behind their talking points

“It’s a huge giveaway to the wealthy.” FALSE
Leave it to Democrats to suggest that letting ALL MAINE PEOPLE keep their money is a giveaway to the wealthy. The current income tax treats income tax taxes everybody as if they were wealthy, with the top rate starting at $21k.

The Democrats object to moving anyone off the income tax rolls. In their so-called Better Deal, they rejected the Governor’s proposal to exempt individuals with income less than $9,7000 and started taxing income at $5,200. If they consider people making more than $5,200 a year wealthy, we might need more than a Constitutional amendment to set them straight.

What we’re proposing is to let people decide how to spend their own money and to stop penalizing work and investment in Maine. What Democrats are saying is that they know better than you do how to spend your money.

“It jeopardizes funding for education and other vital services.” FALSE and IRRESPONSIBLE

Democrats used the same tactics when we passed the tax cut in 2011 and it hasn’t come to fruition. Education funding in Maine has far outpaced inflation while our student population has declined. We need to focus on growing our private sector economy, not growing government spending. If Democrats are ready to get serious about education reform, let’s have that conversation rather than dragging our kids and our vulnerable populations into false political posturing.

“It will trigger property tax increases.” FALSE
Eliminating the income tax is a state-level tax proposal. It would have no impact on property taxes. Let’s be clear, we’re not linking the elimination of the income tax to eliminating any specific programs or other revenue-generating options.

“It will make an unfair tax system even less fair.” FALSE

Subjecting Mainers to one of the largest tax burdens in the country is unfair. Creating an economy where young people flee for lack of opportunity is unfair. The status quo is unfair.

​The Property Tax Fairness Credit and the Sales Tax Fairness Credit proposed in the latest budget proposal are examples of the types of tools available.

“It is a failed prescription for growing Maine’s economy.” FALSE
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New Hampshire’s economy is exceedingly healthy with this prescription. They have faster GDP growth, higher incomes, and a consistently lower unemployment rate. The status quo is a demonstrably failed prescription for Maine’s economy.

BOTTOM Line:

LET THE PEOPLE DECIDE. By passing the Constitutional amendment through the legislature, we allow the people of Maine to decide how they will be taxed. They will have to approve it by referendum.

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